CULTURE

The media localization industry is a bridge between language service providers and media services providers, each of which is forecasted to grow significantly in the next few years with CAGR of 7.92% and 7% respectively. The main drivers for our industry are growth in online video entertainment and national legislation/regulation. Despite a somewhat humbling year in 2022, streaming remains strong, with billions of dollars spent on content.

And the name of the game is international expansion.

Media localization is a rapidly evolving field, driven by changing consumer preferences, technological advancements, and evolving business models. As the demand for localized content continues to grow, our industry will continue to experience skill shortages, including translators from non-English languages and real-time subtitlers.

With the rise of live-streaming platforms like Twitch and YouTube Live, real-time localization has become essential to ensure that content is accessible to a global audience in real-time.

The decision to localize into a particular language is a matter of strategic importance for media entertainment companies, since adding new language options opens up new audiences and geographical revenue streams. Localization has the potential to drive even more revenue in the media industry.

However, 2022 was a year of great uncertainty for the media industry. As a result, many media producers are focusing more on the bottom line and saving on costs, and customers are looking for smarter and cheaper solutions as their need for localization grows.

As media entertainment companies watch their bottom line, requiring cheaper and better services with tighter timelines, a system of tiered assets seems to be emerging. At the lower end: basic, perhaps automatically generated subtitles or captions. High-profile content, meanwhile, receives bespoke subtitles created by the best of audiovisual translators.

The effects of technology

Many folks expect that technology — whether that’s speech recognition, machine translation, or voice synthesis — will be able to improve the efficiency and quality of the media localization process and help address the talent shortfall in the industry.

And there’s no denying that machine translation has improved by leaps and bounds over the past couple of years. Using language technology like machine translation also gives companies a strong economic advantage, lowering market prices for many language combinations that might otherwise be quite expensive without the use of machine translation.

But while these technologies have made significant progress in recent years, they are not without drawbacks and adverse effects. As industry professionals, we surely know the importance of using them in conjunction with human resources as a tool to enhance efficiency rather than as replacements for human resources.

The dubbing industry has undergone significant changes with the advent of synthetic voices. These could certainly revolutionize the way we do voiceover work. However, the use of synthetic voices in the dubbing industry raises various legal and ethical concerns that must be carefully considered before they are widely adopted. It’s important to strike a balance between the benefits of using synthetic voices and the potential risks associated with their use.

On the positive side, seen from a purely cost-saving perspective, AI-generated voices could potentially reduce the cost of dubbing by eliminating the need for human voice actors. It could also speed up the process by generating dialogue more quickly than human actors. And AI-generated voices could improve accuracy by generating dialogue that perfectly matches the lip movements.

However, they may not be able to fully replace human voice actors in all scenarios in the foreseeable future. There are certain nuances and emotions that only a human actor can convey through their voice.

And from a legal perspective, copyright law could throw a wrench in some production companies’ efforts to implement particularly AI-heavy dubbing strategies. In general, copyright law protects original creative works by granting exclusive rights to the creators of those works. However, the use of AI in the creation of creative works raises questions about who the actual creator of a work is, and whether the use of AI algorithms to create a work is sufficient to qualify for copyright protection.

These are complex legal issues that legal experts and policymakers alike are exploring. As AI continues to evolve and become more prevalent in creative fields, it’s likely that copyright law will need to adapt to ensure that creators and artists are adequately protected and compensated.

A new role for localization companies to play

Media entertainment providers tend to prefer working with fewer vendors based on master service agreements, pushing localization providers into offering more adjacent services, such as mastering, versioning, distribution, and more.

The most forward-thinking localization companies are outgrowing the traditional, transaction-based language services concept. Much like the role that local film distributors had before the streaming revolution, we are increasingly becoming strategic partners and advisors for our customers’ global needs.

By offering shows and movies that resonate with local audiences, streaming companies can deepen the connection that subscribers feel to their service, which can lead to increased loyalty and higher retention rates. Another factor driving the trend toward original local content is the need to comply with local content regulations in many countries. Many governments require streaming providers to produce a certain percentage of local content as a condition of doing business in their countries.

Downward price pressure

The language industry, including the media localization segment, is highly fragmented, with many small- and medium-sized companies competing for a share of the market, resulting in a reverse “auction-type” of situation, where suppliers compete for the buyer’s business by underbidding.

This increase in competition among localization providers has led to lower prices for buyers of their services. But that also means lower compensation for translators, who often refuse to work for the usual rates or choose to leave the industry.

Many established localization companies face talent shortages and struggle with high workloads and tight or unachievable deadlines. Despite fierce competition for resources as well as customers, companies are not intent on owning the majority of the market share and often subcontract to other localization companies to meet targets and deadlines.

While new entrants may disrupt the industry and threaten the larger companies that have significant control in the market by introducing innovation, offering products or services at a lower cost, targeting niche markets, being more flexible and agile, and introducing disruptive business models, the trend is towards competitive collaboration and frequent buyouts and consolidations. This trend of mergers and acquisitions that we’ve seen so frequently may also have an impact on the overall market dynamic.

We’re in a good spot

The language services industry is rife with opportunity to attract funding from private equity and venture capital investors — it’s highly fragmented and has seen pretty consistent revenue growth even in years such as 2022, which was a bit of an annus horribilis for many other industries.

With geopolitical uncertainty, a looming energy crisis in Europe, and global inflation, the global language industry remained resilient. Private equity was active in 2022 as language and localization companies are perceived as the beneficiaries of the ongoing AI boom, as most of us already have an understanding of AI role in real-world, useful workflows.

On a more optimistic note: I was recently struck by the dynamism of Profuz Digital, a company that develops subtitling and digital management software platforms. Their understanding of the industry’s requirements concerning dubbing and subtitling engaged my interest. The company’s CEO, Ivanka Vassileva, told me she saw the need for hybrid (human-enabled) live subtitling services that expand outside of the traditional media industry. This approach can be used in many other areas, such as for online meetings, where automatic transcription and translation have already been incorporated via online meeting platform providers.

“Our approach is that dubbing and subtitling processes should be organized in parallel within the same platform, and not separately, as we’re currently still seeing a majority of the time,” Vassileva said. “The preparation work needs to be synchronized and shared, as this greatly improves quality and final delivery of the material, including content that has been both dubbed and subtitled. Recent Oscar award-winning films All Quiet on the Western Front and Everything Everywhere All at Once illustrate how to creatively use dubbing and subtitling effectively at the same time to enhance a viewer’s experience.”

“What is very exciting is that dubbing services applications are finally extending outside of traditional movie dubbing alone,” she added. “Dubbing is now used by TV and radio broadcasters, streaming operators, corporates, and others, which opens it up to a wider audience and endless opportunities. Dubbing and subtitling are most certainly in a good spot and well-placed for organizations to invest.”